The number of vessels hit by sanctions has surpassed 1,000 with data from S&P Global Market Intelligence showing that more 800 of these ships do not have confirmed insurance. Moreover, the average age of sanctioned ships – 21 years – is some eight years older than the global average, adding to growing concern that the sprawling so-called shadow fleet could lead to multiple costly environmental catastrophes.
Despite slowing, the grey fleet is still growing by around 10 tankers a month, according to brokers BRS.
Nearly two in three vintage tankers carried Iranian, Venezuelan, or Russian cargoes last year, according to estimates from broker Gibson.
Global insurer Allianz’s 2024 shipping report noted of the shadow fleet: “Despite efforts to crack down on these vessels, the number of tankers is actually increasing, and we have seen a number of groundings and collision incidents.”
In recent weeks the UK has teamed up with a number of north European neighbours to challenge the insurance coverage of vessels heading from Russia through the Baltic and along the English Channel.
The Danish government led discussions with neighbours for months last year looking at ways of barring some of Russia’s shadow fleet from transiting the Baltic Sea, something that gained added importance following a collision involving a laden Russian shadow tanker in March last year.
Russia sends about a third of its seaborne oil exports through the Danish straits with around one in three of these ships having unknown insurance.
Today, some 175 tankers laden with Russian oil transit the Baltic each month, according to Craig Kennedy who runs the Navigating Russia substack and proposed similar Baltic insurance checks in a paper for the Brookings Institution in May last year.
If the insurance verification program is successful in the Baltic, Kennedy has suggested setting up a similar one in the Aegean.
“Together with the Baltic, this would deny Russia the ability to load up to 80% of its oil exports on shadow tankers. Instead, Russia would be compelled to use mainstream tankers, thus increasing the exposure of export revenues to price cap constraints,” Kennedy wrote.
